Swarovski Optik thinks about job cuts
May 2nd, 2008 in Austrian Industry
The Austrian family enterprise Swarovski suffers under a low dollar price, and cheap business competition from Egypt and China.
These are the main reasons that the company thinks to cut about 400 jobs.
The sales decreased down to 5 percent. Now the company must also decrease its output.
Not that serious is the situation for the managers of Swarovski. “We are going to survive”, they say. There were a much bigger problems for the company in the 70’s, when the oil crisis made the sales go down to 40 percent.
In the last two years Swarovski invested more than 80 million Euro in its location in the Tyrolean town of Wattens.
Yes, no doubt grim for everyone, but not so serious for Austria and Germany.
There is an opportunity for Swarovski to market high quality optics against cheaper imports to the US market. It has very high brand recognition (thanks to birders & hunters) that remains under developed no doubt because management felt itself unable capture a share of the medium-price market. This is changing at light speed. The middle (and some cases bottom) of the market is vulnerable because in a shrinking economy people are reluctant to buy cheap goods and more inclined to buy a product having not only “good” value, but “lasting” value.
Ironically, quality means more when you have less to spend and you to tend to spend what you do have on “quality” and durability.
That huge middle-class American market is about to wean itself off consuming vast quantities of cheaply made goods.
Don’t miss the opportunity. Assess the market properly and manufacture within reach of the middle class. You will sweep the field.